Gibson Buys Majority Stake In Teac, Sees Onkyo Synergies

Tokyo – Gibson Guitars, which last year bought a 51 percent stake in Onkyo USA, is buying a majority stake in Japan’s Teac to share technology and marketing ideas and reduce expenses, the companies announced.

Gibson is buying 157.4 million shares at 31 yen per share, or $51.8 million based on a conversion rate of 94.1 yen to the U.S. dollar.

The transaction, representing Gibson’s largest investment to date in another company, was unanimously approved by both companies’ boards of directors.

In the U.S., the three companies have an opportunity to work together to reduce costs, Gibson and Teac said in a prepared statement.

Gibson stands to benefit from Teac’s technology, and Teac stands to benefit from Gibson’s “marketing and distribution strength,” said Gibson chairman/CEO Henry Juszkiewicz during a press conference here.

Said Teac president Yuji Hanabusa, “We can work together to reduce costs and bring benefits to all three parties.” Although Hanabusa said he had no concrete examples yet to offer on cost savings, he said the combination of companies “will be a huge benefit to all of us.”

In their prepared statement, the companies said Gibson can “leverage Teac’s R&D expertise to develop a new pipeline of products for Stanton DJ in the pro audio field, as well as in the [musical instrument] and fretted instruments segments for further product development,” the companies said in the prepared statement.

The statement also said the deal will expand “the size and reach” of Gibson’s pro audio business with products that both complement and build upon [Gibson’s] KRK, Cerwin-Vega!, and Stanton portfolio of world-class studio monitors, sound reinforcement equipment and DJ gear, respectively, “in addition to the premium consumer electronics of strategic partner Onkyo Corporation.”

The deal is “yet another step in Gibson’s aim to become the largest music and sound business in the world,” the statement said.